Bondfield Construction Company Ltd. has applied for court protection from its creditors after facing a flood of lawsuits related to its problems completing major public-sector construction projects in Ontario.

The company, based in Vaughan north of Toronto, filed an application on Wednesday in Ontario Superior Court in Toronto to seek protection under the Companies’ Creditors Arrangement Act (CCAA). The application would allow Bondfield to continue operating while it restructures its debts.

Bondfield sought an interim order from Justice Glenn Hainey to prohibit creditors from taking action against the company until the application can be finalized. The case is expected to return to court early next week.

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In its application, Bondfield said it needs protection from creditors to focus on completing construction projects while seeking to strengthen its balance sheet.

“It is necessary and in the best interests of the Bondfield Group and their stakeholders that the Bondfield Group be afforded the breathing room provided by the CCAA as they attempt to restructure their business,” the application said.

Bondfield’s $80-million credit facility with Bridging Finance Inc. has matured and the lender has demanded full repayment, the company said in the application. Since August, Bondfield said, all of its operations, including overhead, have been funded by Zurich Insurance Company Ltd., except for costs that could be covered by ordinary cash flow.

Zurich has agreed to provide $8-million in debtor-in-possession (DIP) interim financing to help the company continue to operate, but only if it is granted priority status in any claims against Bondfield, the company said.

“Without the DIP facility, the Bondfield Group will be forced to shut down its operations with a significant loss of employment," the application said.

Bondfield has about 330 employees and independent contractors, and more than $1-billion in current construction contracts for projects involving major public-sector institutions across Ontario, including hospital and university buildings. It has been far behind schedule on a number of projects, and has been terminated from at least three of them.

The company said more than 200 lawsuits have been filed against it or its board of directors over the past 12 months alone, many related to unpaid accounts from subcontractors or breaches of contract from the institutions that hired the construction firm.

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During 2018, numerous subcontractors took steps to get paid for work they had already completed on projects, including seeking payments directly from the public-sector institutions and receiving compensation from Zurich.

Several companies affiliated with Bondfield have also been placed into receivership in recent months, including three special-purpose companies set up by Bondfield for individual construction projects. The three companies, which were placed into receivership in December, were created to manage expansions of the Cambridge Memorial Hospital in southwestern Ontario, St. Michael’s Hospital in downtown Toronto and the Hawkesbury and District General Hospital.

Forma-Con, another Bondfield affiliated construction company based in Concord, Ont., was placed into receivership in November.

In March last year, the City of Brampton terminated Bondfield as the builder for its Gore Meadows Community Centre and Library, complaining little progress had been made in the prior eight months. Also last year, the City of Toronto rescinded a contract to build the new St. Lawrence Market North building, and Hamilton Health Sciences terminated Bondfield’s contract to build an addition at the Hamilton General Hospital.

Officials from Bondfield were not available to comment on Thursday evening.

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